Contractual Tariff Clause Analysis

Summary

The clause in question outlines a clear process for handling tariff costs, requiring both parties to first attempt to recoup costs from the OEM. If unsuccessful, discussions are mandated to assign responsibility. The clause includes a right of last refusal on tariff responsibility. Exiting the agreement would depend on the contracts termination clauses and any breach of obligations. For specific concerns, reviewing the termination provisions is advisable.

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How robust is this clause
This clause appears to be fairly robust as it outlines clear steps and responsibilities for handling tariff costs:
- Both parties agree to first recoup costs from the OEM.
- NSI must make best efforts to pass through costs.
- If unsuccessful, both parties will discuss and assign responsibility.
- Right of last refusal on tariff responsibility is retained.
Do you have any concerns about specific parts of this clause?
AMTP and NSI agree that if tariffs are implemented by the US and/or Canadian governments both parties agree that the first recourse is to recoup these costs from the OEM. If NSI provides best efforts to receive a pass through on these tariff costs and are unsuccessful, both companies will engage in discussions to develop a pathway and assign responsibility for tariff costs incurred.
This clause seems comprehensive as it outlines a step-by-step process for dealing with tariff costs. It ensures both parties make efforts to recoup costs from the OEM first and engage in discussions if those efforts fail.
Do you have any concerns about the enforceability of this clause or its potential impact on your business operations?
Can the customer exit this easily
It looks like the customer is concerned about the ease of exiting the agreement. Generally, the enforceability of a contract clause depends on its clarity and mutual agreement.
- This clause seems comprehensive and requires both parties to follow a process.
- Exiting would depend on the contract's termination clauses and any breach of obligations.
Do you have any specific concerns about the termination provisions in your contract?